Telecommunications Policy

ISP Rate Hikes Follow Net Neutrality Regulations in the Netherlands

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Lost footage from an unreleased Tron sequel.

Today in unintended consequences: A Dutch Internet Service Provider apparently tried to add a surcharge to competing services accessed over its connections. When the surcharges were outlawed via a strict new net neutrality regulation, the company responded by hiking its rates across the board:

The Netherlands' largest telecommunications company announced big price hikes for mobile Internet customers on Tuesday, less than a month after Parliament approved one of the world's strongest "net neutrality" laws.

KPN had posted weak first quarter earnings as its customers with mobile Internet subscriptions flocked to Skype and other Internet-based messaging services, undercutting KPN's own more costly offerings.

When the company tried to add a surcharge on competing services, the move backfired. Customers protested loudly and Parliament passed a bill barring companies from hindering competitors or giving preference to their own traffic on mobile networks.

"KPN has decided not to block any services or to set separate rates for different services," the company said in a statement Tuesday. It said its new charges "comply with the forthcoming Dutch legislation and are net neutral."

It's not a foregone conclusion that the FCC's net neutrality regulations will lead directly to higher overall Internet connection rates, but it's certainly a possibility. When ISPs are banned from covering their operating and development costs through targeted pricing schemes, they end up with little choice but to resort to general rate hikes. 

Read my March 2011 magazine feature on the FCC's fight for net neutrality here